Institutional Analysis and Economic Policy

This is a book on economic policy that takes the role of democracy seriously. It challenges the conventional wisdom espoused by leaders of both major political parties in the US, and increasingly by leaders of other nations, that markets and not democratic policy formation should determine the legitimate role of private interests in the conduct of the economy. The authors of the essays in this book reject the mainstream neoclassical view that the market should rule "über alles." Examining the problems existing in a number of crucial areas of economic policy, they demonstrate the inadequacy of orthodox view that markets can generate economic welfare without the guidance of democratically formulated economic policies. Using the principles of the original institutional economics (OIE), they fashion long-term strategies for the formation of economic policies that can accommodate institutional changes necessary to meet the ever-changing circumstances faced by nations in a global economy. The editors, Tool and Bush, have assembled a group of scholars with special expertise in the problems they address. In each instance they offer original insights into issues that many in the mainstream had thought were settled. The analysis and policy proposals of the essays in this book do not defer to the dominant vested interests in industry, academe, or government. The views expressed are fresh, candid, and break out of the ideological boxes that have for so long encapsulated public debates on economic policies.